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Couche-Tard Moves on Casey's '

Canadian company reaches out to shareholders in bid to buy Midwest chain

LAVAL, Quebec -- If Casey's General Stores won the first volley in April in Alimentation Couche-Tard's public and hostile bid to purchase the convenience store chain, Couche-Tard launched a second strike yesterday, confident it will walk away with a victory and prepared to launch larger weapons if necessary.

"We are more optimistic today than we were in April," Couche-Tard president and CEO Alain Bouchard told CSP Daily News, referring to Couche-Tard's initial public announcement that it had offered Casey's $36 per share to purchase the company. "We haven't seen [image-nocss] any other buyer out there."

As reported in a Morgan Keegan/CSP Daily News Flash, Alimentation Couche-Tard Inc. commenced the offer through an indirect wholly owned subsidiaryACT Acquisition Sub acquire all of the outstanding shares of common stock of Casey's General Stores Inc. for, again, $36 per share in cash.

"We continue to believe that a combination of Casey's and Couche-Tard is compelling and would deliver superior value to our respective shareholders, employees, business partners and other constituencies," Bouchard said in the statement. "It remains our strong preference to enter into a negotiated transaction with Casey's, and it is unfortunate that the Casey's board has rejected our $36 per share all-cash offer without any discussion or negotiation.

"We are committed to making this combination a reality and, to that end, are taking our offer directly to the shareholders of Casey's. We are confident that the shareholders of Casey's will recognize the seriousness of our interest and send a strong message to the Casey's board that they should sit down with us immediately to negotiate a mutually acceptable transaction."

For its part, Casey's did release a statement advising its shareholders "not to take any action" regarding Couche-Tard's tender offer.

Rather, it urged shareholders to wait until after Casey's Board of Directors reviewed the tender offer and made a recommendation to shareholders, to be done within 10 business days.

"The company will advise shareholders of the reasons for the board's recommendation by making available to shareholders and filing with the Securities and Exchange Commission a solicitation/recommendation statement on Schedule 14D-9," the company stated.

Couche-Tard's all-cash offer represents a 14% premium over the closing price of $31.59 per share of Casey's on April 8, 2010, the last trading day prior to the public disclosure of Couche-Tard's proposal, a 17% premium over the 90-calendar day average closing share price of Casey's as of April 8, 2010, and a 24% premium over the one-year average closing share price of Casey's as of April 8, 2010.

The offer also implies a last-12-months (as of January 31, 2010) EBITDA multiple of 7.4x and a price of $1.3 million per store, which compares favorably to corresponding metrics of publicly traded companies and precedent transactions in the convenience store industry, according to a Couche-Tard statement. The transaction has a total enterprise value of approximately $1.9 billion on a fully diluted basis, including net debt of Casey's of approximately $29 million.

The tender offer is scheduled to expire at midnight EST, on Friday, July 9, 2010, unless extended.

Unless the board of directors of Casey's is willing to negotiate and enter into a merger agreement with Couche-Tard, Couche-Tard intends to, among other things, nominate, and solicit proxies for the election of, a slate of nine independent directors for election to the Board of Directors of Casey's at the 2010 annual meeting of shareholders of Casey's. Couche-Tard intends to provide formal notice to Casey's today or shortly thereafter of its plan to make such nomination.

About the board of directors issue, Casey's stated, "If and when Couche-Tard nominates directors, the board will evaluate the submission and candidates consistent with the Company's bylaws."

Goldman, Sachs & Co. is acting as financial advisor to Casey's, and Cravath, Swaine & Moore LLP and Ahlers & Cooney, PC are providing legal advice.

Credit Suisse Securities LLC is acting as financial advisor to Couche-Tard and dealer manager for Couche-Tard's offer, and Dewey & LeBoeuf LLP is acting as legal counsel. Innisfree M&A Incorporated is acting as information agent for Couche-Tard's offer.

Alimentation Couche-Tard Inc., Laval, Quebec, is the leader in the Canadian convenience store industry. In North America, Couche-Tard operates a network of 5,883 c-stores located in 11 large geographic markets, including eight in the United States covering 43 states and the District of Columbia, and three in Canada covering all 10 provinces.

Casey's General Stores Inc., based in Ankeny, Iowa, has 1,513 corporate stores in 11 states.[CLICK HERE FOR PART II OF THIS STORY.]

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